REDSTONE RESOURCES LIMITED — Capital/Financing Update 2007

Dec 3, 2007

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Redstone Resources Limited

ABN

42 090 169 154

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Unquoted Options

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

1,500,000 Options

1,000,000 Options are exercisable at $0.95 per share at any time on or before 30 November 2012.

500,000 Options are exercisable at $1.20 per share at any time on or before 30 November 2012.

+ See chapter 19 for defined terms.

4	Do the +securities rank equally in allrespects from the date of allotmentwith an existing +class of quoted+securities?	No
	If the additional securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipate for the next dividend,(inthecaseofatrust,distribution) or interest payment•the extent to which they do notrankequally,otherthaninrelation to the next dividend,distribution or interest payment	options into ordinary shares	They will rank pari passu upon conversion of
5	Issue price or consideration	Nil
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	and appointment.	Pursuant to Non-Executive Director Agreement
7	Dates of entering +securities intouncertificated holdings or despatchof certificates	29 November 2007
		Number	+Class
8	+classNumberandofall+securitiesquotedonASX(including the securities in clause 2if applicable)	36,486,928	Ordinary Shares(RDS)

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(including the securities in clause 2if applicable)	Restricted securitiesuntil 3 August 2008	40,683,794
		3,350,000 UnquotedOptions	$0.25ClassAIncentiveOptionsexercisable any time12monthsfrom3August2006andexpiring 31 December2008.
	2,850,000 UnquotedOptions	$0.50ClassBIncentiveOptionsexercisable any time12monthsfrom3August2006andexpiring 31 December2009.
	8,000,000 UnquotedOptions	$0.25Optionsexercisable any time12monthsfrom3August2006andexpiring 31 December2009.
		3,000,000 UnquotedOptions	$0.25Optionsexercisable any timefrom 3 August 2006and expiring 3 August2009.
		50,000 UnquotedOptions	$0.75Optionsexercisable 12 monthsfrom 30 March 2007and expiring 30 March2010.
		400,000 UnquotedOptions	$1.50Optionsexercisable 12 monthsfrom29June2007and expiring 29 June2012.

+ See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(including the securities in clause 2if applicable)	1,000,000UnquotedOptions	$0.95Optionsexercisableatanytime on or before 30November 2012.
		500,000 UnquotedOptions	$1.20Optionsexercisableatanytime on or before 30November 2012
10	Dividend policy (in the case of atrust, distribution policy) on theincreased capital (interests)	N/a

Part 2 - Bonus issue or pro rata issue

acceptances or renunciations

11	Issecurityholderapprovalrequired?
12	Is the issue renounceable or nonrenounceable?
13	Ratio in which the +securities willbe offered
14	+Class of +securities to which theoffer relates
15	+Recorddatetodetermineentitlements
16	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?
17	Policy for deciding entitlements inrelation to fractions
18	Names of countries in which theentity has +security holders whowillnotbesentnewissuedocuments
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closingdateforreceiptof

	20	Names of any underwriters
--	----	---------------------------

• 21 Amount of any underwriting fee or commission
• 22 Names of any brokers to the issue
• 23 Fee or commission payable to the broker to the issue
• 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders
• 25 If the issue is contingent on +security holders' approval, the date of the meeting
• 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled
• 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
• 28 Date rights trading will begin (if applicable)
• 29 Date rights trading will end (if applicable)
• 30 How do +security holders sell their entitlements in full through a broker?
• 31 How do +security holders sell part of their entitlements through a broker and accept for the balance?
• 32 How do +security holders dispose of their entitlements (except by sale through a broker)?

• See chapter 19 for defined terms.

+Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34	Type of securities(tick one)
(a)	Securities described in Part 1
(b)	All other securitiesExample: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employeeincentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

II--

• 35 If the + securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders
• 36 If the + securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38	Numberofsecurities+quotation is sought	for	which
39	+securitiesClassofquotation is sought	for	which

+ See chapter 19 for defined terms.

40 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

		Number	+Class
42	Number and +class of all +securitiesquotedonASX(includingthe
	securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under

sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ....................Date: 4 December 2007...................

(Company secretary)

Print name: Miranda Conti ......................................................... == == == == ==

• See chapter 19 for defined terms.